London | Economic storm clouds were massing over Europe on Thursday, as Mario Draghi quit as Italian prime minister, the European Central Bank jacked up interest rates by an unexpectedly hawkish 0.5 of a percentage point, and traders sold off Italian bonds.

The ECB has been forced to throw the monetary-policy fire blanket over the continent’s inflation flare-up, but its unexpectedly swift action may exacerbate the uncertainty and threat surrounding Italy, the 19-country eurozone’s third-largest economy.